Hyundai shares close seven per cent lower after discounted listing

Analysts had largely expected the stock to list with flat to modest gains, especially after the recently concluded IPO received a lukewarm response from retail investors and non-institutional investors (NIIs).
The ₹27,870 crore IPO launched by the Korean automaker, the largest in India’s capital market history, was subscribed 2.37 times.
The ₹27,870 crore IPO launched by the Korean automaker, the largest in India’s capital market history, was subscribed 2.37 times.
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MUMBAI: Shares of Hyundai Motor India Ltd (HMIL) made a tepid debut on the stock exchanges on Tuesday, listing at ₹1,934 on the NSE, a discount of 1.3% to the issue price of ₹1,960. On the BSE, the shares were listed at ₹1,931, down 1.5%. The stock faced selling pressure throughout the trading session, closing 7% lower at ₹1,820.40 apiece on the BSE. In contrast, the benchmark indices, BSE Sensex and NSE Nifty, fell over 1% on Tuesday.

Analysts had largely expected the stock to list with flat to modest gains, especially after the recently concluded initial public offering (IPO) received a lukewarm response from retail investors and non-institutional investors (NIIs).

The ₹27,870 crore IPO launched by the Korean automaker, the largest in India’s capital market history, was subscribed 2.37 times.

While weakness in the broader market likely weighed on sentiment, Hyundai shares followed the trajectory of other companies with large IPOs that made weak debuts. Shares of the state-owned insurer LIC, which had launched a ₹21,000 crore IPO, fell 7% on its listing day, while fintech firm Paytm saw a 27% drop on debut.

“We initiate coverage on Hyundai Motor India (HMIL) with a 'Reduce' rating (target price of ₹1,750, at 23x core September 2026E PER, similar to Maruti Suzuki India Ltd), amid a lacklustre 5% earnings per share (EPS) compound annual growth rate (CAGR) over FY24-27E.

HMIL has established a strong franchise in India; however, the lack of major launches (a key growth driver historically in the passenger vehicle segment) over the next 12-18 months, muted 5% capacity CAGR, higher royalty, and lower treasury income are likely to restrict EPS growth,” Emkay Global said in a note.

At the close of trading, HMIL’s market capitalisation stood at ₹1.48 lakh crore, about ₹11,000 crore lower than its pre-listing valuation based on the upper end of the issue price.

Shivani Nyati, Head of Wealth at Swastika Investmart, said that despite the discounted listing, Hyundai’s strong fundamentals—being the second-largest passenger vehicle manufacturer in India and its strategic focus on the SUV segment—continue to support its long-term growth prospects. She advised that investors with a long-term perspective may consider holding the stock.

Global brokerage firm Macquarie has initiated coverage on Hyundai with an "Outperform" rating and set a target price of ₹2,235. Macquarie views Hyundai as a strong player in the premium passenger vehicle market and believes it should trade at a higher price-to-earnings (PE) multiple compared to its peers. Similarly, Nomura has issued a ‘Buy’ rating on HMIL, with a target price of ₹2,472. The brokerage noted that HMIL’s emphasis on style and technology, alongside ongoing premiumisation, should drive high-quality growth.

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